Wednesday, 11 March 2015

Coal scam: The case against Manmohan Singh will simply not fly in court

The summons issued to former Prime Minister Manmohan Singh
as an accused in the coal blocks allocation scam is probably a
misdirection of the prosecution's efforts. Not only will it probably go
nowhere, but it will effectively shift the focus away from the real
scamsters to the man who happened to figuratively head the coal ministry
at that time - and who is highly unlikely to have derived any personal
or pecuniary benefit from the misallocations.

The case, which involves the allocation of Talabira-II
and Talabira-III coal blocks in Odisha’a Jharsuguda district in 2005,
runs something like this: the blocks were originally allocated by the
Screening Committee, headed by then Coal Secretary PC Parakh (also an
accused in the case, along with Kumar Mangalam Birla of Hindalco), to
the public sector Mahanadi Coalfields Ltd and Neyveli Lignite
Corporation. But Birla wrote a letter to Manmohan Singh seeking his intervention. Singh directed him back to the coal ministry. (Read the full details in this Business Standard summation here)

Manmohan Singh in a file image.

The coal ministry, which too was headed by Manmohan Singh,
initially said that Hindalco already had coal available from Mahanadi
Coalfields which it had not used. Birla then wrote a second letter to
the PMO explaining that the old coal linkage had not been used because a
“bauxite mine lease relating to the aluminium plant had not
materialised.” Birla also said that his request for Talabira-II had the
backing of the Odisha Chief Minister, Naveen Patnaik.

It was after
such to-ing-and-fro-ing that the PM gave his okay to changing the
allocation pattern, and even this was not about favouring only Birla.
The final allocation pattern was 70 percent to Mahanadi Coalfields, and
15 percent each to Neyveli and Hindalco in a joint venture that included
both Talabira-I and Talabira-II.

In this new arrangement, Neyveli did
get short-changed, for it would get only around 29 percent of its
requirements, and Hindalco over 80 percent. To remedy this, it was
agreed that Neyveli could be given more coal from another block,
Talabira-III.

Now, it is always possible to interpret Manmohan
Singh’s intervention as an attempt to favour Birla, but the problem is
that one can never know. The political authorities have to constantly
take such decisions keeping the larger interests of the country in mind,
including public sector and private interests.

The problem with
summoning Manmohan Singh to appear in person at the CBI court in April
is that it will be seen as needless political harassment. Singh has
already given his version of events to the CBI when the agency queried
him this January, and calling him to court to make the same statement is
hardly going to give the case new legs.

The downside of dragging
Manmohan Singh into the case physically is this: it will shift focus
from the real crooks who may have made money in the coal block
allocations to the politician under whose watch it happened. This is not
likely to lead anywhere. The real case the CBI has to chase is who made
the money – but that is not in sight.

In the Hindalco case, the
Odisha CM clearly backed Birla vocally through a letter supporting the
allocation, and all Manmohan Singh has to say in court is that in a
federal set-up he has to respect the wishes of states as well.

The
case against Manmohan Singh, or for that matter Naveen Patnaik, if he
too is dragged in, will fail unless the CBI can prove mala fide intent
in the final decision.

To prove this, they will have to show that
either Singh or Patnaik (or even people close to them) had something
personal to gain from changing the allocation to help Birla. The same
has to be proved against Parakh and Kumar Birla, too – which is unlikely
to happen.

What Manmohan Singh can be blamed for are three things.

First, he presided over an opaque process which enabled someone to make money from wayward coal block allocations.

Second,
he failed to shift the process towards the transparency of auctions
even though he once favoured it. Who, or what, forced him to change his
mind will tell us who may have benefited from this. It is more than
likely that Congress and state-level regional politicians will have been
responsible for this, but there is no proof as of now.

Third,
as PM, Manmohan Singh is ultimately responsible – politically – for
what went wrong in his administration. His party may have paid a price
for this in the recent elections.

However, unlike the 2G spectrum scam, where A Raja
was clearly seen as the man behind the machinations to favour a few, in
the coal block scam, one can spot only political failures, but no
smoking gun leading to the real crooks.

This shows that the CBI is on the wrong trail. Manmohan Singh isn’t the one to chase; he may
know who should be chased, but probably won’t tell. The questions to
ask are (1) who, or what, made him change his mind on coal auctions, and
(2) who may have got paid in each separate coal block allocation. On
this, there is no progress whatsoever. The case in court won’t fly for
lack of legal evidence.